Business

TISCO production expansion given new life

Released at: 13:56, 20/11/2015

PM directs those involved to restart stalled iron and steel project.

by Hoai An

The Office of the Government recently issued Announcement No. 375/TB-VCPC on the conclusions of the Prime Minister regarding the second phase of the suspended production expansion by the Thai Nguyen Iron and Steel Joint Stock Corporation (TISCO).

The Prime Minister has requested TISCO negotiate with the China Metallurgical Group to resolve problems and determine the total investment of the project and actively prepare the most beneficial plan.

He also directed ministries, departments, and banks to consider import duty exemptions on equipment to support the project’s construction as well as restructure TISCO’s loans, repayment terms, and interest rates so it may continue to implement the project.

General Director of TISCO, Mr. Hoang Ngoc Diep, said that after receiving directions from the government it will liquidate the contract with its former contractor and repair deteriorated equipment in the suspended project, to ensure construction begins in 2016 and will be completed in 2017.

The production expansion project had total investment of VND3.8 trillion ($172.3 million) and began in November 2007. Delays, however, led to an increase in total investment to VND8.1 trillion ($363.4 million) and construction then ceased in the fourth quarter of 2012 because of issues in its capital arrangements.

Relevant units have supported TISCO to overcome the difficulties in capital and implement the project. At the end of January this year the Vietnam Development Bank signed a credit agreement with TISCO for loans of VND1.3 trillion ($60.9 million). In March the State Capital Investment Corporation agreed to contribute VND1 trillion ($44.8 million) and in June VietinBank officially signed a credit contract with TISCO for an additional loan of VND1.1 trillion ($49.3 million).

The corporation plans to complete negotiations with bidders and seek comments from relevant authorities before signing contracts at the end of this month.